Major flaws in Finance Bill must be addressed – Doherty
Sinn Féin Finance Spokesperson Pearse Doherty TD has said the Finance Bill, as published, contains major flaws which will need to be addressed. He cited the lack of any action on a 5-year Dividend Withholding Tax for international funds and the lack of retrospective action on the 80% cap on capital allowances that can be written off by multinationals as examples of flaws.
He also said the move to bring forward the cash in date for land to be sold CGT free would benefit certain speculators without any guarantee of any effect on housing supply and that it needs to be limited to land, not property, suitable for residential development.
Deputy Doherty said:
“The Finance Bill, like the Budget, is deeply flawed. Overall, the emphasis on tax cuts at a time of crisis in our public services is inexcusable. In terms of specifics, it still fails and its omissions and gaps need to be addressed.
“One of the flagship announcements on budget day was the crackdown on multinationals that have onshored hundreds of billions of intellectual property here over recent years, using these as writes offs against their profits. The result of the change is supposed to be that this Multinationals are no longer able to completely wipe out their company’s tax liability. However, as drafted the Finance Bill would only apply this cap to assets onshored from 11 October this year. That means the hundreds of billions transferred here in recent years, especially 2015, can be still be used by companies to potentially neutralise their corporation tax bill.
“The second flaw is the omission of a move to end the 5-year Dividend Withholding Tax that encourages vultures to hold land for five years. Department of Finance officials have raised concerns that this measure introduced last year is clogging up the housing market. Yet, there is no mention of it in the Finance Bill.
“What is mentioned is the 7-year CGT exemption which does not even apply to vulture funds. By allowing landowners to cash in on this land and property years early, the Finance Bill is creating a bonanza for certain speculators. There is no provision that this land must even be suitable for development so it is doubtful that housing supply will be increased at all by this move. This must be rectified so that it is only applied to land that is suitable for residential development.
“The minor changes in the stamp duty change means working farmers will not be protected from the tripling of stamp duty while the transitionary period is to be welcome for farmers who are in the process of buying.
“The decision not to make any changes to the Help to Buy scheme amounts to another €40m straight into the pockets of developers. Likewise, there is no action on the Research and Development Credit which has is in need of reform.
“I welcome the detail on the Sugar Tax and look forward to making improvements to the Bill.”